Table of Contents
- What is a CFA?
- How many Charter holders are there?
- What is the structure of the CFA exams?
- What score do I need to pass the exam?
- What are the pass rates for the Level I exam?
- What is the best way to prepare for the Level I exam?
- Are there any areas of the exam that are more important than others?
What is a CFA?
CFA stands for Chartered Financial Analyst. It is a designation awarded by the Association for Investment Management and Research (AIMR) to investment professionals who have distinguished themselves through a combination of relevant work experience and rigorous testing. It is becoming the premier professional certification in the investment management industry.
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How many Charter holders are there?
The first Charters were awarded in 1963 when 268 charters were granted. The number of Charters granted each year has been growing steadily. In the 2001 exam year, 8,383 Charters were awarded bringing the total to 49,266. More details about the growth in Charter holders can be found on AIMR@@@s website at: http://www.aimr.com/cfaprogram/cfaprofile.html.
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What is the structure of the CFA exams?
Starting in 2003, the Level I exams are offered twice a year on May 31, 2003 (June 1 in Eastern Asia and Oceania) and December 6, 2003 (December 7 in Eastern Asia and Oceania). The format for the Level I exam is multiple choice with the 120 questions offered during a three hour session in the morning and 120 questions offered during a three hour session in the afternoon. The curriculum for each exam will be the same. The Level II and III exams are offered once a year on May 31, 2003 (June 1 in Eastern Asia and Oceania). The format for the Levels II and III three exams are three hours of multiple choice questions either in the morning or the afternoon and three hours of essay and problem questions during the other three hours period.
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What score do I need to pass the exam?
This is a difficult question to answer. First, AIMR does not tell you your exam score. They give you feedback on your performance in the different body of knowledge areas. The feedback is in the form of where you scored greater than 70%, less than 50%, or between 50% and 70% in each of the body of knowledge areas. Second, AIMR does not give a total score for the exam nor do they disclose what the required score for passing is.
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What are the pass rates for the Level I exam?
The pass rates for the Level I exam have varied over time, typically being in the range of 50% to 60%. The pass rate on the year 2002 Level I exam was 44%.
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What is the best way to prepare for the Level I exam?
AIMR publishes a study guide for the Level I exam. Once you have registered for the exam, you can download the study guide from the AIMR website.
The study guide contains an 18 session study program to help candidates prepare for the exam. Each study session has required readings and a list of Learning Outcome Statements (LOS) from which the exam is constructed. In total, there are approximately 750 LOS in the study program. An outline of the Study program can be downloaded from: http://www.aimr.com/canservices/private/studyguides/. An AIMR username and password are required.
The most effective method of self-study would be to layout a 20 week timeline leading up to the exam. Cover one study session each week for the first 18 weeks. As you study, make notes from the readings for each LOS with page numbers for later references. During the last two weeks review your notes.
There are also a number of prep courses providers that offer a range of services such as 3 to 5 day seminars, semester courses, self study courses, sample questions, videos and audio tapes, and reading summaries. A list of prep course providers is available on the AIMR website at http://www.aimr.com/cfaprogram/prep.html. These services should be viewed as study aids and not as a replacement for studying. You are the one that will be taking the exam, you are the one that needs to be prepared.
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Are there any areas of the exam that are more important than others?
In the study guide, AIMR publishes the relative weightings that each area of the body of knowledge will receive on the exam. You will notice that Ethics and Professional Standards only account for 15% of the exam material. This weighting understates the importance that AIMR puts on Ethics and Professional Standards. It is very likely that if you do not achieve some minimum level of performance in this area of the exam, you will not pass the exam no matter how well you performed in the other areas.
